Forex Trading

Trade CFDs on a wide range of forex pairs, including EUR/USD, GBP/USD and AUD/USD on an award winning MT4 platform.

What is Forex Trading

Forex trading, also known as foreign exchange trading or currency trading, is the global marketplace for exchanging national currencies against one another. As one of the largest financial markets in the world, it operates 24 hours a day, five days a week, and boasts a daily trading volume that exceeds $6 trillion. This market is essential for international trade, investments, and global economic stability.

Forex Currency Pairs and Quotes

In Forex trading, currencies are quoted in pairs, and each pair is associated with a two-part price: the bid and the ask. The bid price represents the maximum amount a buyer is willing to pay for a currency, while the ask price represents the minimum amount a seller is willing to accept. Currency pairs are categorised into three types:

Major Pairs

Major pairs involve the most traded currencies globally, such as EUR/USD, USD/JPY, and GBP/USD. Major pairs typically offer high liquidity and tight spreads.

Minor Pairs

Minor pairs consist of currencies from major economies but do not involve the US dollar. Examples include EUR/GBP, AUD/JPY, and CAD/CHF. Minor pairs often have wider spreads compared to major pairs.

Exotic Pairs

Exotic pairs involve one major currency and one currency from a smaller or emerging market, such as USD/ZAR (US Dollar/South African rand), USD/CNH (US Dollar/Chinese Renminbi Offshore) or EUR/HUF (Euro/Hungarian Forint). Exotic pairs tend to be less liquid and more volatile.

Understanding Forex Trading Base and Quote Currency

Forex trading involves buying one currency while simultaneously selling another. These transactions occur in currency pairs, such as EUR/USD, GBP/USD or GBP/JPY, where the first currency listed is the base currency and the second is the quote currency. The goal of forex trading is to profit from the fluctuations in exchange rates between these two currencies.

For instance, if a trader believes the euro will strengthen against the US dollar, they might buy the EUR/USD pair, hoping to sell it later at a higher price. Conversely, if they expect the euro to weaken, they would sell the pair, aiming to repurchase it at a lower price.

What Are Pips in Forex Trading?

pip, which stands for “percentage in point,” is the smallest price movement that can occur in a currency pair within the Forex market. Typically, for most currency pairs, one pip equals 0.0001. For example, if the EUR/USD pair moves from 1.1050 to 1.1051, it has increased by one pip. Pips are fundamental in Forex trading as they help calculate both profits and losses, representing the incremental changes in exchange rates that traders aim to capitalise on.

What Is the Spread in Forex Trading?

The spread in forex trading refers to the difference between the bid (selling) price and the ask (buying) price of a currency pair. The spread is essentially the cost of executing a trade and is a primary way brokers earn money. For instance, if the EUR/USD bid price is 1.1050 and the ask price is 1.1100, the spread is 50 pips. In markets with high liquidity, such as major currency pairs, spreads are typically narrower, while less liquid markets, like exotic currency pairs, often have wider spreads.

What Is Lot Size in Forex Trading?

Lot size in Forex trading determines the volume or amount of currency involved in a trade. It is a crucial factor in calculating a trade’s potential profit or loss. Different lot sizes include:

Lot TypeLot SizeUnits of Base CurrencyPip Value (USD)
Standard Lot1.0100,000 units$10
Mini Lot0.110,000 units$1
Micro Lot0.011,000 units$0.10
Nano Lot0.001100 units$0.01

Standard Lot

Standard lot is equivalent to 100,000 units of the base currency. For example, one standard lot in the EUR/USD pair involves trading 100,000 euros.

Mini Lot

Mini lot is equal to 10,000 units of the base currency, which is one-tenth of a standard lot. This size is commonly used by traders with smaller accounts.

Micro Lot

Micro lot consists of 1,000 units of the base currency, one-tenth of a mini lot, often used by beginners or those minimising risk.

Nano Lot

Nano Lot comprises 100 units of the base currency and is ideal for extremely cautious traders who prefer minimal trade amounts.

Understanding lot size is vital for effective risk management in Forex trading, as it directly influences the financial impact of each pip movement.

The Structure of the Forex Market

The forex market is unique in its decentralised nature. Unlike stock markets, which are typically centralised on a single exchange, forex trading occurs over-the-counter (OTC). This means that transactions are conducted directly between parties, usually through electronic trading platforms or via telephone, without a centralised exchange.

The forex market is composed of several key players:

  • Central Banks: Central banks play a pivotal role in the forex market by managing currency reserves, setting interest rates, and intervening in the market to stabilise their currency.
  • Commercial Banks: These institutions conduct large volumes of currency transactions for clients and for their trading accounts. They also provide liquidity to the market.
  • Hedge Funds and Investment Managers: These entities trade significant amounts of currency to hedge against risk or for speculative purposes.
  • Corporations: Multinational companies engage in forex trading to facilitate international trade, such as converting revenue from overseas sales.
  • Retail Traders: With the advent of online trading platforms, individual traders now have access to the forex market. Although retail traders account for a smaller portion of the overall market, their influence has grown significantly in recent years.

How Do Forex Market Hours Affect Trading?

The forex market operates 24 hours a day, five days a week, due to its global nature. This continuous operation is possible because as financial centres in different parts of the world open and close, the market remains active, with trading sessions in Asia, Europe, and North America. This 24/5 structure allows traders to react promptly to global events and economic developments, regardless of their location, ensuring that trading opportunities are available almost around the clock.

Factors Influencing Forex Prices

Currency prices in the forex market are influenced by various factors, which traders must consider when making decisions:

  • Interest Rates: Central banks’ interest rate policies significantly drive currency prices. Higher interest rates tend to attract foreign investment, leading to an appreciation of the currency.
  • Economic Indicators: Economic data such as GDP growth, employment figures, and inflation rates can impact currency values. Positive economic news typically strengthens a currency, while negative data can weaken it.
  • Political Stability: A country’s political environment can influence its currency. Stable governments tend to attract investment, while political uncertainty or unrest can lead to currency depreciation.
  • Market Sentiment: Traders’ perceptions and expectations can also drive currency prices. If investors believe a currency will strengthen, they may buy it, increasing its value.
  • Global Events: Events such as natural disasters, geopolitical tensions, or pandemics can have immediate and often unpredictable effects on currency prices.

How Forex Trading Works

Forex trading can be conducted through various methods, depending on the trader’s goals and risk tolerance. Following are the types of forex trades.

Spot Market

The spot market is where currencies are bought and sold for immediate delivery. Prices are determined by supply and demand in real-time, and trades are usually settled within two business days. The spot market is the most common form of forex trading.

Forward Market

In the forward market, traders enter into contracts to buy or sell a currency at a future date, at a predetermined price. This method is often used by companies and financial institutions to hedge against currency risk.

Futures Market

Similar to the forward market, the futures market involves contracts to buy or sell currency at a future date. However, unlike forward contracts, futures contracts are standardised and traded on exchanges. Futures trading is often used by speculators looking to profit from anticipated currency movements.

Options Market

The options market allows traders to buy or sell a currency at a specific price before a certain date, but they are not obligated to do so. This gives traders the flexibility to hedge against potential losses while limiting their risk.

CFDs (Contracts for Difference)

CFDs are derivative products that allow traders to speculate on currency price movements without owning the underlying asset. CFD trading can offer high leverage, meaning traders can control a large position with a relatively small investment, but it also comes with higher risk.

Read more about Spot vs Futures vs Contract-For-Difference

Risk Free Demo Trading Account

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What Is Leverage in Forex Trading?

Leverage is a key feature of forex trading, allowing traders to control larger positions than they would with their capital alone. For example, with a leverage ratio of 50:1, a trader can control a $50,000 position with just $1,000 of their capital. While leverage can amplify profits, it also increases the risk of significant losses.

What Is Margin in Forex Trading?

Margin is the amount of money required to open and maintain a leveraged position. It is essentially a good-faith deposit that the broker holds to cover potential losses. If a trader’s position moves against them, they may receive a margin call, requiring them to deposit additional funds to maintain their position.

How to Manage Risk in Forex Trading?

Risk management is a crucial aspect of forex trading and successful traders employ various strategies to protect their capital and limit losses through the following steps.

Stop-Loss Orders

A stop-loss order automatically closes a trade when the price reaches a predetermined level. This helps traders minimise losses if the market moves against them.

Take-Profit Orders

Stop-loss orders are take-profit orders that automatically close a trade when the price reaches a specific profit target. This allows traders to lock in gains and avoid the temptation of holding onto a position for too long.

Position Sizing

Traders carefully consider the size of their positions relative to their overall capital. By risking only a small percentage of their account on each trade, they can minimise the impact of any single loss.

Diversification

Diversification can reduce risk in forex trading. By trading multiple currency pairs, traders can spread their risk across different markets and reduce their exposure to any one currency.

How to Get Started in Forex Trading with ATFX?

We offer the popular MetaTrader 4 (MT4) platform, which you can fully customize. This popular trading platform is well respected and has many features and benefits.

You have all the features and benefits of MT4 and our complementary tools, which offer you a great trading experience when combined. These include Trading Central, Market News, and Autochartist, to name a few. Learn how to use MT

Why trade Forex with ATFX?

Competitive Spreads

Enjoy competitive spreads on EURUSD and GBPUSD.

24/5 Forex Trading

24 hours a day, 5 days a week. Flexible Long/Short trading.

Trade 40+ Currency Pairs

We enable our traders to implement their own trading strategies based on 44 forex trading currency pairs, with localised expert support available 24/5.

Zero Commission

Tight, competitive spreads – meaning you pay less to open a position.

Forex Currency Pairs Offered by ATFX

Product Name
EUR/USDUSD/JPYGBP/USDUSD/CHFAUD/USDNZD/USDUSD/CAD
MINORS
AUD/CADAUD/CHFAUD/JPYAUD/NZDCAD/CHFCAD/JPYCHF/JPYEUR/AUDEUR/CADEUR/CHFEUR/GBPEUR/JPYEUR/NZDGBP/AUDGBP/CADGBP/CHFGBP/JPYGBP/NZDNZD/CADNZD/CHFNZD/JPY
EUR/HUFEUR/PLNUSD/CNHUSD/HKDUSD/SGDUSD/CZKUSD/DKKUSD/HUFUSD/MXNUSD/NOKUSD/PLNUSD/SEKUSD/ZAR

Learn more about Forex product specifications, charges, swaps, trading hours.

What is Forex Market

Forex market is where currencies are traded worldwide. It’s like a giant marketplace where people exchange one currency for another, like swapping dollars for euros. This market is crucial for international trade, helping businesses and individuals buy goods and services from other countries.

Forex market participants include banks, financial institutions, multinational corporations, governments, central banks, hedge funds, individual traders, and investors, all engaging in buying, selling, and exchanging currencies for various purposes such as trade, investment, speculation, and hedging against currency risks.

What is Forex Trading

Forex trading is exchanging one currency pair for another to grow your capital. Each transaction works by simultaneously selling one currency to buy another or vice versa. Forex investment opportunities exist because currencies constantly fluctuate due to their changing demand and supply. Most of the trading activity happening on the forex market is by institutional participants like banks or funds.

Many investors trade forex only to make speculative gains, not necessarily physical ownership of the preferred currencies. For example, you can buy U.S. dollars if you believe the U.S. dollar will strengthen against other currencies. All the trading is done over the counter, meaning there is no physical exchange like in other markets.

Forex Trading Platform

Forex trading platform is an accepted software interface that lets traders access all the tools needed for order placement. You use these software platforms to execute all the buy or sell orders when you trade forex.

Forex brokers provide their clients with a wide selection of automated order-processing solutions. The forex trading platform is customised to the client’s needs because individual clients may have varying market-monitoring styles and preferences.

The most popular forex trading platform is MetaTrader 4(MT4), a favourite among many because they offer impressive ways to customise, extend or add new scripts. Their ability to have custom scripts makes it easy to practice automated trading. Forex trading can be done with algorithms that process trades if they meet certain rules within a given framework.

Individual traders can look at functionality and ease of use when choosing which platform to install. With that approach, you may choose between a web-based platform or downloading the software package before installing it on your computer.

Forex Market Hours

Forex market hours in our platform are available 24 hours a day, five days a week.

 

Market Open (GMT) - Summer Session Close (GMT) - Summer Session Open (GMT) - Winter Session Close (GMT) - Winter Session
Sydney
10:00 PM
7:00 AM
11:00 PM
8:00 AM
Tokyo
11:00 PM
8:00 AM
12:00 PM
9:00 AM
London
7:00 AM
4:00 PM
8:00 AM
5:00 PM
New York
12:00 PM
9:00 PM
1:00 AM
10:00 PM

Forex Economic Calendar

Forex economic calendar keeps you updated on important events influencing forex markets, ensuring you stay ahead with timely insights for strategic trading.

calendar-economic

Forex Demo Account

To learn how to trade the markets, new traders must practice before investing real money. Using a forex demo account lets anyone trade with real-world prizes but without using real money. Such accounts are a good way to understand how to read charts and experiment with different trading strategies. As a result, brokers provide demo accounts for free. The good thing about demo trading is that you can use all the same tools and mechanics you will still encounter while trading with a real account.

To be on the right track, brokers recommend that beginners use demo trading until they are confident that they have developed a profitable system of placing trades. A first-time trader should not use real money to make their first trades or try a new trading system. Even very experienced traders use dummy accounts to experiment with a new strategy or improve on an existing one. They shift their activities to a live forex trading account only when certain.

forex-demo-account

Live Forex Trading Account

The spreads you pay are very competitive. There’s no commission and no hidden charges. You’ll execute your trades through the MT4 trading platform, which is regarded as one of the best trading platforms on the market.

You experience STP access when trading forex online via the MT4 platform and your ATFX live forex trading account. This straight-through processing ensures latency is kept low. Your trades are cleanly routed directly to the market as soon as possible without any broker interference.

Our ATFX account is suitable for all levels. Your experience doesn’t matter because the account, combined with MT4, can be as simple or sophisticated as you need it to be. Open live forex trading account now !

Register for an account

1.

Open your account

Complete the Live Trading Account application form. Once we have verified identity, we will set up your account.

2.

Fund your account

Deposit funds from a credit card, E-Wallet or bank transfer to start trading.
3.

Start trading

Trade on every device, including PC, Android, iPad and iPhone or via web browser.

FAQ

The average daily turnover of the forex trading market is up to 5 trillion USD, several times more than any stock market in the world. The high volatility makes FX one of the most exciting markets for traders.

 

The forex market is open 24 hours a day, 5 days a week. It starts with the New Zealand opening, followed by Australia, Tokyo, and London, and finally closing in New York. Forex (FX) means the exchange of one currency for another. There are always investment opportunities in the FX market, if the investor is optimistic about the trend of a particular currency, they may go short/sell or go long/buy it. Each investor needs a forex trading platform to access the markets to trade forex.

 

Forex prices fluctuate constantly, this can be due to several scenarios, including political turbulence, interest rates being increased/decreased, stock market movement, economic environments, military affairs, and many other factors.

 

Participants in the forex market include commercial institutions, investment banks, hedge funds, governments, issuers of banknotes, transnational organisations, and private investors from many different countries. The high liquidity these participants generate (the amount of money available to buy or sell) provides a steady flow of forex investment opportunities.

Once you have familiarised yourself with the forex market through demo trading, the next step of your journey begins when you open a profile account with a trustworthy broker. You can complete a profile at this stage so your broker can identify you. The profile opening process requires your name and login information, such as email and phone contacts.

 

For most brokers, there are clear menus to let you download the required forex trading platform to install on your trading station. You could however, choose to use the browser version of your broker’s trading portal. A browser-based portal is convenient for traders who want to access one trading account on more than one device.

 

Next up, ensure that your account is completely verified before you fund the account. Always confirm whether you are using a demo account or a live trading account every time you want to trade forex. You can then refer to the same strategies you perfected in demo trading to identify opportunities for your first trade. Once you place your first few trades, stay calm and adjust your positions according to how the market environment behaves.

To become a good forex trader, you first must master what currencies to trade and when to trade them. This requires consistency in training through a demo account. During demo trading, learn the important aspects of forex trading, such as fundamental analysis, technical analysis, and money management.

 

Fundamental analysis lets you understand how currency pairs react to certain news events and announcements. In other words, you become a better forex trader if you know whether some news is good or bad for the currencies you want to trade. Technical analysis, on the other hand, lets you identify certain patterns and trends whenever you use your forex trading platform.

 

You must have the right money management routines to be among the best. You have to protect your trading account by committing manageable lot trade sizes. Never get too confident when you have a good run of profits or too scared when a few trades go against your predictions. You can always go back to your demo account to polish your strategy even as you continue to operate a different account to trade forex.

There is a misconception that forex is an easy way to make overnight riches. The truth is that you will only make money on some trades. You can succeed in forex trading only if you have the discipline to stick to a working strategy. Poor money management is where most people struggle in their forex trading careers.

Furthermore, it is not wise to measure success in forex according to how much you can earn in one trade. A longer-term perspective helps as you trade forex for small, consistent profits instead of making poor decisions while chasing one or two golden chances.

Unless you are a trading genius, getting rich by forex trading is like winning a lottery. You can grow your wealth steadily if you invest in the right training tools, commit enough time, and master the psychological implications. Some new traders quit too early simply because they needed to accept that there are winning days while some go wrong. To be on the right side, you aim to make money on forex by targeting small but consistent gains with modest risk exposure.

A pip (percentage in point) is the smallest whole unit of price measurement for an exchange rate quote. It also measures the movement between the bid and the asking price. One pip is the same as a hundredth of a percent or 0.0001. When you trade forex, the price movement for most currency pairs is quoted up to four decimal places. For example, if the price of the GBPUSD moves from 1.1655 to 1.16556, it is said to have gained 1 pip. However, prices of pairs using the Japanese Yen are often quoted to two decimal places.

Base CurrencyCounter Currency
Bid PriceGBPUSDAsk Price
1.16551.1657
Spread = 1.1655 – 1.1657 = 2 pips

Therefore, pips are a way to measure price movement down to four decimal places to determine whether you are moving towards a profit or loss and by how much difference.

Pips are also a good measure of distance to a price target. You can use a fixed number of pips to set an exit price or a stop-loss every time you open a new trade. Pips play an important role in risk management during forex trading as a price movement measurement.

The value of a pip (pip value) is done by multiplying one pip (0.0001) by the standard lot size. One standard lot size is 100,000 units of the base currency.

The pip value = (0.0001 x traded amount) / spot price

Lot size is amount of currency you’re trading in a single transaction. Standard lot sizes are typically 100,000 units of base currency, but there are also mini, micro, and nano lots with smaller amounts.

Margin is the deposit with your broker to control a much larger position size. Leverage allows you to trade a lot size that’s bigger than your deposit, but the margin acts as a guarantee to cover potential losses.

Spread is the difference between the bid (buying) price and the ask (selling) price of a currency pair.

ATFX

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Services to professional clients will not be impacted. For professional applications please contact [email protected]

ATFX

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Please visit https://www.atfx.com/en/ to proceed.

ATFX

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本网站的产品及服务不适合英国居民。网站内部的信息和素材不应被视为分销,要约,买入或卖出任何投资产品。请继续访问 https://www.atfx.com/en/

ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://www.atfx.com/en/ to proceed.

ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://www.atfx.com/en/ to proceed.

ATFX

Restrictions on Use

Products and Services on this website are not suitable for Hong Kong residents. Such information and materials should not be regarded as or constitute a distribution, an offer, solicitation to buy or sell any investments.

使用限制: 本網站的產品及服務不適合香港居民使用。網站內部的信息和素材不應被視為分銷,要約,買入或賣出任何投資產品。

ATFX

Restrictions on Use

AT Global Markets (UK) Limited does not offer trading services to retail clients.
If you are a professional client, please visit https://www.atfxconnect.com/